Major eFLOW® Accounts Payable Automation for SAP wins at U.S. technology supplier and at global automotive components manufacturer in Austria as well as partnership with electronic invoicing supplier in Israel reflect Company’s strong focus on Financial Process Automation;

eFLOW project wins sustained around globe, from exams processing in Latin America to government ID verification in the U.K. to eFLOW5 upgrade at Chinese bank in Hong Kong

Announced wins at two leading banks in Italy with total contract value of over $700,000; mobiFLOW wins in Europe and the U.S. and a mobile partnership with U.S.-based iStream Financial Services;

Appointment of Kristian Niklasson as Chief Service Officer, consolidation of product portfolio and expansion of product management team to streamline and increase efficiency of product development, deployment operations and increase profitability of professional services.

Michael Schrader, CEO of Top Image Systems commented, “Q1 was a solid quarter in many respects. Revenue grew 28% sequentially, costs were reduced to enable us to stem recent losses and achieve approximately break-even Adjusted EBITDA and we completed the first phase of the launch of our new Financial Process Automation (FPA) solution. In addition, we signed a key global partnership agreement with Xerox and we saw improvement of our direct sales and marketing execution under our expanded management team. Executives demonstrated their commitment to and belief in Top Image via purchases of our stock. We see continued interest from banks and financial service providers globally for our mobile image processing platform that drives mobile pay and enrollment solutions, as demonstrated by a number of new deployments we announced. With cost cutting measures having been implemented, solid contribution from core product lines, improved sales and marketing processes, investment in new leadership, shift in focus from technology to end-to-end solutions and optimization of product management and delivery processes, we are confident in growing shareholders’ value in 2016 and beyond.”

First Quarter Financial Results

Total revenues for the first quarter of 2016 were $8.5 million compared to $6.6 million in the fourth quarter of 2015 and $8.3 million in the first quarter of 2015. Recurring (SaaS and maintenance) revenues for the first quarter of 2016 were $5 million, compared to $4.7 million in the fourth quarter of 2015 and $4.8 million in the same period of last year.

In March 2016 the Company announced a restructuring initiative to reduce costs and return the Company to financial health and profitability. Consequentially, Q1 2016 quarterly non-GAAP operational costs were decreased by $0.68 million compared to Q4 2015 and will continue to decrease in the next quarters.

Gross profit for the first quarter of 2016 was $4.2 million compared to $2.4 million in the fourth quarter of 2015 and to $4.5 million for the first quarter of last year. Gross margin for the first quarter of 2016 was 50%, compared to 36% in the fourth quarter of 2015 and 54% for the first quarter of last year. Adjusted EBITDA was $0 compared to $(2.5) million in the fourth quarter of 2015 and $0 for the first quarter of 2015.

GAAP net loss for the first quarter of 2016 was $(2.1) million compared to $(6.1) million in the fourth quarter of 2015, and $(1.0) million in Q1 last year. The current period loss includes the impact of $1.2 million in employees’ severance restructuring costs. We expect to complete the implementation of our restructuring plan by the end of 2016. First quarter 2016 GAAP loss per share was $(0.12) compared to $(0.34) for the fourth quarter of 2015 and $(0.06) for the first quarter of 2015. First quarter 2016 Non-GAAP* loss per share was $(0.02) compared to $(0.13) per share for the fourth quarter of 2015, and $(0.03) for the first quarter of 2015.

Conference Call

The Company will host a conference call and webcast today, Tuesday, May 17th at 10 a.m. EDT, during which TIS management will present and discuss the financial results and be available to answer questions from investors.

To join the conference call, please dial in to one of the following teleconference phone lines using the numbers listed below. Please begin placing your calls at least 5 minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the U.S. Toll/International dial-in number.

* Non-GAAP Financial Measures This release includes non-GAAP financial measures, including, without limitation, adjusted EBITDA (which eliminates the impact of interest, taxes, amortization and depreciation expenses, as well as non-cash stock-based compensation expenses and other non-recurring items not part of regular business), Adjusted EBITDA margin, Non-GAAP Net Income (Loss) (which eliminates the impact of amortization expenses as well as non-cash stock-based compensation expenses and other non-recurring items not part of regular business) and Non-GAAP Income (Loss) per share. Non-GAAP measures are reconciled to comparable GAAP measures in the tables below.

The presentation of these non-GAAP financial measures should be considered as an addition to TIS’ GAAP results provided in the attached financial statements for the first quarter ended March 31, 2016, and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The attached tables reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure. TIS’ management believes that these non-GAAP financial measures provide meaningful supplemental information regarding TIS’ performance by excluding the impact of certain charges and gains that may not be indicative of TIS’ core business operating results. TIS’ management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing TIS’ performance. These non-GAAP financial measures also facilitate comparisons to TIS’ historical performance and its competitors’ operating results. TIS includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.

About Top Image SystemsTop Image Systems™ (TIS™) is a leading innovator of enterprise solutions for managing and validating content entering organizations from various sources. Whether originating from mobile, electronic, paper or other sources, TIS solutions deliver the content to applications that drive the organization. TIS's eFLOW is a common platform for the company's solutions. TIS markets its platform in more than 40 countries through a multi-tier network of distributors, system integrators, value-added resellers as well as strategic partners. Visit the company's website http://www.TopImageSystems.com for more information.

Caution Concerning Forward-Looking StatementsCertain matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied in those forward looking statements. Words such as "will," "expects," "anticipates," "estimates," and words and terms of similar substance in connection with any discussion of future operating or financial performance identify forward-looking statements. These statements are based on management's current expectations or beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially including, but not limited to, risks in product development, approval andintroduction plans and schedules, rapid technological change, customer acceptance of new products, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of TIS and its competitors, risk of operations in Israel, government regulation, litigation, general economic conditions and other risk factors detailed in the Company's most recent annual report on Form 20-F and other subsequent filings with the United States Securities and Exchange Commission. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Top Image Systems Ltd.

Consolidated Balance Sheet as of

March 31,

December 31,

2016

2015

In thousands

Unaudited

Audited

Assets

Current Assets:

Cash and Cash Equivalents

$

2,114

$

2,404

Restricted Cash

179

262

Trade Receivables, net

10,324

9,348

Other Accounts Receivable and Prepaid Expenses

1,327

932

Total Current Assets

13,944

12,946

Long-Term Assets:

Severance Pay Funds

1,358

1,327

Restricted Cash

154

147

Long-term Deposits and Long-term Assets

191

204

Property and Equipment, net

1,327

1,444

Intangible Assets, net

4,699

5,058

Goodwill

19,028

19,091

Total Long-term Assets

26,757

27,271

Total Assets

$

40,701

$

40,217

Liabilities and Shareholders' Equity

Current Liabilities:

Short-term Bank Loans

$

220

$

77

Trade Payables

1,648

1,541

Deferred Revenues

3,610

2,966

Accrued Expenses and Other Accounts Payable

6,169

4,421

Total Current Liabilities

11,647

9,005

Long-Term Liabilities:

Accrued Severance Pay

$

1,563

$

1,533

Non-current Deferred Revenues

3,130

3,280

Other Long-term Liabilities

317

407

Total Long-term Liabilities

5,010

5,220

Total Liabilities

$

16,657

$

14,225

Total Parent Shareholders' Equity

$

24,014

$

25,967

Non-controlling Interest

30

25

Shareholders' Equity

24,044

25,992

Total Liabilities and Shareholders' Equity

$

40,701

$

40,217

Top Image Systems Ltd.

Statement of Operations for the

Three months ended

Three months ended

March 31,

March 31,

2016

2015

In thousands, except per share data

Audited

License Revenues

1,756

2,280

Services Revenues

6,701

5,981

Revenues

$

8,457

$

8,261

Cost of License Revenues

361

369

Cost of Services Revenues

3,889

3,408

Cost of Revenues

4,250

3,777

Gross Profit

4,207

4,484

Expenses

Research & Development

1,291

1,112

Sales & Marketing

2,163

2,672

General & Administrative

1,362

1,187

Amortization Costs

127

74

Restructuring Charge

1,183

-

6,126

5,045

Operating Loss

(1,919

)

(561

)

Financial Expenses, net

(78

)

(356

)

Other Income, net

5

3

Loss Before Taxes on Income

(1,992

)

(914

)

Tax Expenses

123

77

Net Loss

(2,115

)

(991

)

Net Income Attributable to Noncontrolling Interest

(2

)

(4

)

Net Loss

$

(2,117

)

$

(995

)

Earnings per Share

Basic Earnings (Loss) per Share

$

(0.12

)

$

(0.06

)

Weighted Average Number of Shares Used in Computation of Basic Net Income (Loss) per Share

17,919

17,828

Diluted Earnings (Loss) per Share

$

(0.12

)

$

(0.06

)

Weighted Average Number of Shares Used in Calculation of Diluted Net (Loss) Earnings per Share